Pierre van Lamsweerde, CEO of Nordeon Group, discusses the company’s business strategy and their most recent acquisition of Lamp Lighting.
It all started with the acquisition of the Philips manufacturing sites. How did this come about?
Varova, our investor, had been studying the lighting market for a long period. The conclusion was clear: midsized lighting companies create significant added value and profitability through their focus and agility. With the changes caused by the transition to LED, the lighting industry was (and is) undergoing a kind of ‘creative destruction’, which offered the opportunity to enter this market and to create a new kind of lighting company: focused and agile through its brand, and strong and perseverant through the scale a group can bring. Thanks to a disinvestment by Philips, the possibility arose for us to lay solid foundation for the development and growth of the Nordeon Group, by taking over one of the largest production sites of LED products in Europe – the plant in Springe, Germany.
What is your role at the Nordeon Group and how did you get there?
After completing my Masters in Economics at the Erasmus University in Rotterdam in 1994, I had been working in various positions at Philips until 2006. After eleven years in consumer electronics, I was orientating myself to change industry, to see if I could add value in a totally different industry. I spoke with the Philips lighting team, who convinced me that lighting was much more than incandescent bulbs, much more than just switching on and off, that light could make plants grow, bring shoppers to spend more in stores, bring safety to city centres and, with the transition to LED, an exciting journey lay ahead, in which my high volume electronics experience could be useful.
I fulfilled various roles, and was given the responsibility of the Retail and Hospitality business for EMEA. In 2011 I got introduced to Patrick van Rossum of Varova, who shared his lighting plans with me, and then at the end of 2012 I resigned in order to start at the Nordeon Group.
Since 2013 I have been CEO of the Nordeon Group. The role has changed a lot since the start, and will continue to do so as we grow the group. In the first year it was building the Nordeon brand, the product portfolio and the commercial teams. Now the role is focused on grasping the synergies that our group offers to the seven brands we have, making sure we have the right people in place, and driving innovation.
You have acquired a number of companies over the last couple of years. What was the strategic decision behind these acquisitions?
We have five different synergies that we pursue within the scope of an acquisition. Synergies can mean introducing new products, technologies and markets into the group. On the other hand the Nordeon Group offers the companies a strong scale: scale in purchasing, scale in sales through a global commercial infrastructure and scale in innovation, all in order to accelerate their own growth dynamic.
Next to products and technologies we also focus on geographic market coverage. You can see this quite strikingly in the Nordeon Group’s most recent acquisition, namely that of Lamp Lighting. With Lamp Lighting’s locations in Spain, Chile, Columbia and Mexico we are tapping into new markets, which until now have been unserved by the Nordeon Group. And vice versa, through the Nordeon Group, Lamp Lighting will grow faster in our key markets like UK, Middle East and USA.
What attracted you to acquire the most recent company, Lamp?
Lamp Lighting presents itself as an extremely attractive business for us. Based near Barcelona, the company has design at heart and combines this with technology and innovation. For me this acquisition is a prime example of a classic win-win situation. It is a successful Spanish company founded and managed by the Cusido family. They had successfully taken their company through the 2008 crisis, and once back in their growth mode, they concluded they would need to partner up in order to remain successful. They realised they needed scale, in purchasing power, in innovation, in market access in order to be able to play according to the new rules in the LED times. On the other hand Lamp Lighting will explore the wide technological and industrial base of the Nordeon Group and market its products via Nordeon Group’s worldwide trade and support infrastructure. All in all, the Nordeon Group and Lamp Lighting enjoy the best growth prospects.
Are there more acquisitions to come?
The pace, with which we have progressed in the last few years, has been very fast – especially last year in 2016. Now we are amongst the top businesses in the lighting industry. It is not our aim to be one of the largest businesses in the industry. We want to be the most agile. The businesses must offer synergies in at least two of five areas mentioned earlier – so if we find more companies that fulfil this, we will add those.
We have to use our sense of proportion – that’s how we have acted so far and that’s how we will continue to act. Last but not least, there is always the question of what possibilities the market has to offer. And that, as you can imagine, is something you don’t always have control over.
Do you plan to change the structure and strategy of the companies Nordeon Group have acquired?
Our strategy is successful so I don’t foresee any changes. We are working more to optimise the structure, to make sure we grasp the synergies, to make sure it’s clear for all of our 1000 employees how things work. So no major changes, but definitely improvements will be implemented. Many established businesses belong to the Nordeon Group – think of Hess providing lighting for outdoor areas or WILA and Schmitz for indoor areas. These are businesses with their own history, their own identity. We strive to protect and strengthen these identities. Of course we have synergies in the group – but these serve to strengthen the businesses and to improve performance and the products themselves. In this way the entrepreneurial scope increases thanks to group membership, as does concentration on core activities – completely in the interests and for the good of the customers.
How do you see the lighting industry developing in the future?
Light is becoming more and more intelligent and a part of our whole infrastructure. In outdoor areas the necessary infrastructure ‘light’ will be used for other functions and tasks – and multifunctional elements, depending on the location of the light, will play an increasingly important role. In indoor areas there will also be strong networking – whether in industrial and commercial sectors or in the private sector.
In short: Smart Home, Industry 4.0 and Smart City will shape light and the luminaires of the future decisively.